Nate Chastain, the OpenSea executive who used insider information to profit off of NFT trades, has resigned, the company said in a statement.
Controversy erupted Tuesday night when Twitter user ZuWuTV posted evidence that the OpenSea head of product was buying NFTs shortly before they were featured on the marketplace's web site. The evidence showed Chastain would then sell the NFTs after they were featured prominently on OpenSea, driving up the price.
In a statement, OpenSea CEO Devin Finzer said the company asked for, and accepted his resignation on Wednesday.
"We do not take this behavior lightly. Upon learning of this conduct, we immediately commissioned a third party to conduct a thorough review of the incident and make recommendations on how we can strengthen our existing controls," Finzer said. "That review is ongoing but we are committed to quickly implementing its recommendations."
Chastain has long been an active member of the NFT community, and his dismissal was met with mixed feelings.
On Wednesday, OpenSea slammed Chastain's actions while acknowledging there were no hard company policies against what he did. It announced it had implemented the following policies in response:
- OpenSea team members may not buy or sell from collections or creators while we are featuring or promoting them (e.g. on our home page); and
- OpenSea team members are prohibited from using confidential information to purchase or sell any NFTs, whether available on the OpenSea platform or not.
It's unclear if OpenSea or Chastain could find themselves in legal jeopardy over the incident.
OpenSea is coming off an incredible August. The NFT marketplace logged more than $3 billion in transactions during the month, netting the service more than $75 million in transaction fees alone.
In late July, it announced it had raised $100 million at a $1.5 billion valuation, led by a16z.
Disclosure: Stephen Stirling is a senior reporter for the Street Crypto. He is an NFT artist that uses the platform OpenSea, and holds NFTS from NBA TopShot, Zed.Run, Robotos and the Adam Bomb Gang currently valued at more than $500 USD.